No Factual Basis to Contamination Lawsuit Against Southwestern Energy Production Company

Oct 12, 2010, 16:15 ET from Southwestern Energy Company

HOUSTON, Oct. 12 /PRNewswire/ -- Southwestern Energy Production Company ("SEPCO"), a subsidiary of Southwestern Energy Company, announced that it has filed its first response to unfounded allegations contained in a lawsuit pending in federal court.  The lawsuit claims that SEPCO's drilling operations in Lenox Township, Pennsylvania, contaminated nearby water wells.

In the motion to dismiss, which was filed today in the United States District Court for the Middle District of Pennsylvania, SEPCO challenges the legal basis for several parts of the complaint. The court will review the motion and the briefs to be filed by the parties and decide how much of the lawsuit will be permitted to proceed. At this stage of the lawsuit, the rules only allow SEPCO to challenge the complaint on legal grounds.

As the case moves forward, SEPCO will have the opportunity to place the facts before the court. The complaint alleges that SEPCO's hydraulic fracturing activities contaminated nearby water wells with barium, manganese and strontium. However, neither the drilling fluids nor the fracturing fluids utilized by SEPCO contained any of these substances. Barium is one of the most common elements in the earth's crust and occurs naturally in many water supplies, which has been noted by both federal and state agencies. An August 2007 report by the U.S. Department of Health and Human Services specifically identified Pennsylvania as a state with many communities that "have drinking water where barium content is up to 10 times higher than the Environmental Protection Agency's recommended maximum concentration level." Further, water samples from the area taken prior to the commencement of SEPCO's drilling operations indicated barium readings in excess of federal and state limits.

"SEPCO takes very seriously its obligation to operate safely and is committed to working with the governmental agencies and local communities to ensure that our operations do not adversely impact the environment near our work sites," says Mark Boling, Executive Vice President and General Counsel of Southwestern Energy. "We have worked with the Pennsylvania Department of Environmental Protection with respect to our operations in Lenox Township in order to confirm that our operations were not the source of any concern and that people residing in close proximity to our work sites had safe water to use."

"We are concerned that lawyers for the plaintiffs in this lawsuit are making statements in the media that we believe are demonstrably wrong.  The allegations in this lawsuit are serious, and the parties should make their cases in court with accurate, scientific evidence rather than in the press with statements that have no support in any evidence SEPCO has seen."

Southwestern Energy Company is an integrated company whose wholly-owned subsidiaries are engaged in oil and gas exploration and production, natural gas gathering and marketing. Additional information on the company can be found on the Internet at http://www.swn.com.

All statements, other than historical financial information, may be deemed to be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements that address activities, outcomes and other matters that should or may occur in the future, including, without limitation, statements regarding the financial position, business strategy, production and reserve growth and other plans and objectives for the company's future operations, are forward-looking statements. Although the company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. The company has no obligation and makes no undertaking to publicly update or revise any forward-looking statements. You should not place undue reliance on forward-looking statements. They are subject to known and unknown risks, uncertainties and other factors that may affect the company's operations, markets, products, services and prices and cause its actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In addition to any assumptions and other factors referred to specifically in connection with forward-looking statements, risks, uncertainties and factors that could cause the company's actual results to differ materially from those indicated in any forward-looking statement include, but are not limited to: the timing and extent of changes in market conditions and prices for natural gas and oil (including regional basis differentials); the company's ability to transport its production to the most favorable markets or at all; the timing and extent of the company's success in discovering, developing, producing and estimating reserves; the economic viability of, and the company's success in drilling, the company's large acreage position in the Fayetteville Shale play, overall as well as relative to other productive shale gas plays; the company's ability to fund the company's planned capital investments; the impact of federal, state and local government regulation, including any legislation relating to hydraulic fracturing, the climate or over the counter derivatives; the company's ability to determine the most effective and economic fracture stimulation for the Fayetteville Shale formation; the costs and availability of oil field personnel services and drilling supplies, raw materials, and equipment and services; the company's future property acquisition or divestiture activities; increased competition; the financial impact of accounting regulations and critical accounting policies; the comparative cost of alternative fuels; conditions in capital markets, changes in interest rates and the ability of the company's lenders to provide it with funds as agreed; credit risk relating to the risk of loss as a result of non-performance by the company's counterparties and any other factors listed in the reports the company has filed and may file with the Securities and Exchange Commission (SEC). For additional information with respect to certain of these and other factors, see the reports filed by the company with the SEC. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Southwestern Energy Company



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